Friday, August 19, 2011

Going Postal

The United States Postal Service is trying to deliver some bad news to its employees – 120,000 layoff notices to postal carriers.

The USPS Board of Governors took the step, requesting authority from Congress to remove collective bargaining restrictions and replace existing health care and retirement plans, to stem a massive flow of red ink.

“To restore the Postal Service to financial viability, it is imperative that we have the ability to reduce our workforce rapidly,” they wrote. The post office wants to eliminate 220,000 positions, over 30 percent of its workforce, by 2015, through a combination of layoffs and attrition.

With “snail mail” giving way to digital communications, competition from “small” package giants UPS and FedEx, and the continuing economic doldrums, losses at USPS have been staggering. Revenue from joint programs such as SmartPost have not come close to covering the steady drop-off in postal usage.

In fiscal year 2010, the Postal Service lost $8.5 billion, compared to $3.8 billion the previous year. Mail volume has declined 20 percent in the last four years, with losses totaling over $20B. Postmaster General Patrick Donahoe also wants to close over 3,600 facilities throughout the country.

“The Postal Service is facing dire economic challenges that threaten its very existence,” the USPS report warned, saying the entire system is “facing the equivalent of Chapter 11 bankruptcy.”

While the post office has talked for years of ending Saturday deliveries, we just hope we’ll still be able to get our credit card offers and Bed, Bath & Beyond flyers Monday through Friday. Seriously, it seems unlikely Washington could let the Postal Service go under, but clearly, something has to give.

About TOTALogistix

TOTALogistix is a privately held corporation headquartered in Sparta, NJ. We helped define the Third Party Logistics Industry in 1991. Today we provide a wide spectrum of transportation and related supply chain management services to manufacturers, retailers and distributors throughout North America.
In our 20+ years in business, we’ve saved money for nine out of ten companies whose transportation we’ve analyzed. We’re confident we can do the same for you. Improving logistics performance starts here.